Despite an average rating of indebtedness, and the fact that debt was due mostly to students loans, a large number of individuals are taking advantage of the bankruptcy system as a means to effectively manage their debt.
Alternatives for debt management
Because of the student debt situation, as well as the detrimental effect on credit ratings, bankruptcy is not the magic bullet one may expect. Before considering filing for bankruptcy, it may be wise to first consult with the local credit counseling agency. There are some credit counseling agencies where knowledgeable and trained counselors will have the tools to assess the financial situation correctly and give valuable advice on how to manage debt.
Counselors may also provide some assistance in negotiating debts with creditors. While this may not help with student loans, getting rid of or managing other debt such as credit card balances will ease the financial burden on the debtor and enable them to remain current on payments.
Deciding to move forward with bankruptcy
If the situation does call for bankruptcy, it is advisable to enlist the services of a bankruptcy attorney to help you with the process. This is especially true for Chapter 7 bankruptcy, where a skilled bankruptcy lawyer can take advantage of the state and federal rules on exemptions to retain possession of many of your assets.